Uber- Ride Sharing & Accidents

Uber is a ride-sharing service; rapidly replacing taxis. Everyone with a smartphone can download the Uber app and then use the phone’s GPS to match location and the nearest available driver. The app provides your driver’s name and car details so you know exactly who to look for and it tracks your driver’s location or will text you when your driver has arrived. Uber is becoming increasingly popular and replacing taxis because of its simplicity and cost advantage. Unlike a taxi, you determine exactly how much your trip will cost with Uber in advance. Uber is also desirable because Uber will automatically charge your credit card on file and will email you a receipt. No need to carry cash or a credit card. If you are out with friends and you take an Uber together, you can even use the app to split the fare!

Uber is uber convenient. Yet there may be risks lurking for both the driver and the passengers. Car insurance companies stress that personal car insurance is for private cars only and not for use by Uber drivers driving customers (Insurance could make road bumpy for Uber and Lyft, Stefanie Friedhoff). So using Uber for your trips around the North Shore of Massachusetts (Lynn, Lynnfield, Saugus for example) to get to and from work, to take the kids to school or soccer practice or dance lessons or even grocery shopping at Market Basket, could mean no available car insurance if there is an Uber accident. Check that your Uber driver has a commercial car insurance policy.

According to a recent Boston Globe article, the insurance problem affects only UberX drivers. Uber requires all other drivers to carry commercial insurance policies and licenses but UberX drivers only have access to commercial coverage after they have picked up a customer. Also in Massachusetts, insurance companies are changing personal insurance policies to expressly exclude coverage for ride-sharing activities. Right now it’s a free-for-all. Each State decides what ride-sharing companies, such as Uber, must provide for insurance coverage. For example, California requires all ride-share companies to provide insurance for drivers from the moment they access the ride-share app. California passed this law as a result of the death of a 6-year-old girl. On New Year’s Eve in 2013 a 6-year-old girl was walking with her mother and brother when she was struck and killed by an Uber driver. The Uber driver was logged into the Uber phone app but did not have any passengers in his car. Uber denied responsibility for the incident, stating that because the driver did not have any passengers at the time. The injured girl’s family argued that Uber should be held responsible because the driver was logged into the app and was available to provide rides for customers. Massachusetts insurers seem to be following California and soon, probably all ride-share drivers and companies will be required to have sufficient insurance from the get go.

With the rise of Uber we are seeing the decline of taxis. The use of taxis in Boston has dropped 22 percent in the first half of 2015. Uber drivers line up right beside the taxis at Logan Airport and at the cabstand outside South Station. Ride-sharing companies are not regulated by state legislature so they have a cost and administrative advantage. Governor Baker has proposed legislation which would require background checks of the drivers but would still allow the companies to operate in the same way they do today. But this could affect the cost advantage of ride-sharing; and proponents of Uber argue that ride-sharing is popular because it provides affordable rides to people who would otherwise not consider taking a taxi.

Uber can be convenient and cost effective depending on your needs and circumstances. But be aware of the risks and problems of ride-sharing and especially as to insurance coverage if there is an accident.